Yorkshire Water faces bonus ban as ministers crack down on pollution

Yorkshire Water is among four companies facing an automatic bonus ban for executives, after a new joint regulator report found pollution incidents across the water industry remain far too high.

A Yorkshire Water spokesperson said: “Earlier this year, Nicola Shaw made the decision that it would not be appropriate to receive a bonus due to our performance in the previous financial year, which was not good enough – particularly in relation to our environmental impact.

“We are focused on improving our performance through both operational changes and significant investment in our assets, environment, processes, and people. For example, we have changed the way we tackle pollution, with a greater operational focus on preventing incidents, and we’ve completed infrastructure upgrades at almost 300 locations in the last six months.

“There is much more to do, and we will be open about where we are making progress and where we are not.”

The Environment Secretary, Dame Angela Eagle, is set to take further action against failing water companies, with tougher consequences for executives at persistently underperforming firms.

It follows the first ever joint report from the Environment Agency, Natural Resources Wales, the Drinking Water Inspectorate and Ofwat, which the government says leaves nowhere for underperforming companies to hide.

The report is published alongside the Environment Agency's Environmental Performance Assessment Report, which shows only one company achieved the top four-star rating, with six Category 1 pollution incidents recorded during 2025.

One-star ratings automatically mean bonuses will be blocked for executives at Southern Water, Thames Water, South West Water and Yorkshire Water, under new rules which took effect in 2025.

The same applies to any water company with a Category 1 pollution incident, defined as an incident with a major, serious, persistent or extensive impact on the environment, people or property.

Dame Angela said water companies "have let the public down time and time again, and today's report is further proof that root-and-branch reform cannot wait".

"People are sick of excuses. They want clean rivers, lakes and seas, and the certainty that every pound they pay is being invested wisely, not wasted," Dame Angela said.

Ministers will visit sites with the worst pollution incidents and meet the chief executives of underperforming companies to demand answers on performance and infrastructure delivery.

Responding to the report, a Yorkshire Water spokesperson said the company's "environmental performance last year was not good enough and we understand that customers will be disappointed by this result".

"In particular, we need to reduce pollution incidents and improve the reliability of our environmental performance," the spokesperson said.

"We are not waiting for these assessments to tell us that. We have already changed the way we are tackling pollution, with greater operational focus on preventing incidents, improving the health of our assets, and identifying problems earlier," they said.

"Alongside those operational changes, we are delivering Yorkshire's largest environmental investment programme, which will bring improvements in the long-term," the spokesperson said.

"We're moving at pace, with infrastructure improvements already completed at almost 300 locations in the past six months. Looking forward, we have plans to transform Scarborough's wastewater network and upgrade more than 450 storm overflows by 2030," they said.

"There is much more to do, and we will be open about where we are making progress and where we are not. The test for us isn't simply how much we spend. It is whether customers and the environment see better results," the Yorkshire Water spokesperson said.